Guarantee for unfair calling

The guarantee for unfair calling covers the risk of unfair calling of a contract guarantee by the buyer. The guarantee protects against events that occur with effect from the date on which the contract guarantee is issued. With an EKN guarantee you know that you will receive compensation for unfair calling of the contract guarantee by your customer, which makes it easier for you to offer your customers contract guarantees.

Transactions that can be guaranteed with the guarantee for unfair calling

The guarantee for unfair calling can cover a number of types of contract guarantee. It is used almost exclusively for unconditional contract guarantees (on-demand guarantees), where the buyer is entitled to request payment from the issuing bank without giving a reason.

Who can apply for a guarantee for unfair calling?

Exporting companies can apply for a guarantee for unfair calling for different types of export transactions associated with the export of goods and services. EKN can cover both small- and large-scale transactions with this guarantee.

Conditions for the guarantee for unfair calling

A prerequisite for EKN’s participation is that the transaction promotes Swedish interests and is connected to Swedish export. This normally involves the export of Swedish goods. It could also be a transaction that indirectly leads to Swedish exports.

How does the guarantee for unfair calling work?

The guarantee usually covers 90 per cent of the amount issued, which means your excess is 10 per cent.

There must be an underlying purchase contract before EKN can guarantee a contract guarantee. EKN’s guarantee never covers more than what has been agreed between you and the beneficiary, as described in your application to EKN.

What does the guarantee for unfair calling cost?

EKN charges a premium, which reflects the transaction risk. The premium is expressed as a percentage of the guaranteed amount. You pay the premium in advance when EKN issues the guarantee. The size of the premium depends on the import country, the beneficiary and the exporter’s ability to complete the transaction. A lower premium may apply if the contract guarantee follows the ICC International guidelines for on-demand guarantees.

There is no fee for applying for a guarantee and receiving an offer. EKN’s offer is valid for six months. After this period, you can extend the offer for periods of three months in return for a fee. If the offer results in a guarantee, the extension fee will be returned. The minimum premium is SEK 1,500.